Digital Gold Could Reach $170B by 2031 as Tokenized Demand Grows
A World Gold Council (WGC) and Boston Consulting Group report estimates the digital gold market at $45 billion to $55 billion today, with a base-case projection of $160 billion to $170 billion by 2031 and an optimistic scenario of $270 billion to $280 billion. Its separate estimate of up to $700 billion in latent demand is potential demand if adoption barriers are addressed, not a market-size forecast. The report estimates about $95 billion of base-case growth could come from genuinely new gold demand.
Tokenized gold is worth about $6 billion, after growing fivefold since late 2024. Tether Gold (XAUT) and Paxos Gold (PAXG) recorded more than $90 billion in combined spot trading volume in the first quarter of 2026, exceeding the full-year 2025 total. That is cumulative trading activity, not new investment or the value of tokens outstanding. A survey of more than 12,000 retail investors found nearly nine in ten would consider digital gold under suitable conditions.
Trust, access, product utility and cost remain key hurdles. Investors seek transparent proof of physical backing, clear regulation, consumer protections and redemption options. Familiar financial apps can also broaden access: ownership was up to seven times higher in markets where digital gold was available through such apps. XAUT and PAXG can be used as collateral on Aave, while Paxos has introduced the yield-linked PAXGy product. The outlook points to potential long-term growth in tokenized gold and DeFi collateral use, but custody, security and liquidity risks remain relevant for traders.
Neutral
The report is a long-term adoption signal for tokenized gold, but it does not establish an immediate price catalyst for XAUT or PAXG. The projected market growth, survey interest and increased trading activity could support demand over time, particularly if custody standards, access and collateral use improve. However, trading volume is not the same as net buying, and the $700 billion figure is potential demand rather than a forecast. In the short term, the report alone is unlikely to determine token prices; gold-market movements, crypto liquidity and broader risk sentiment remain more direct drivers. Longer term, greater use of XAUT and PAXG in financial apps and DeFi could improve utility and liquidity, while unresolved trust, security and redemption concerns may constrain adoption. Overall, the implications for the tokens’ prices are mixed and uncertain, supporting a neutral classification.